Traceability and the Ecosystem

What do companies look for to make their supply chain work effectively and efficiently? Do they turn to an ERP solution provider or to a best of breed vendor? How do retailers ensure that traceability of food safety is made easy?

Is there a common link? Yes there is and in the article below, Santosh Takoor, Industry Development Manager for Manufacturing, SAP UK will look at how an ecosystem can collaborate intelligently using either ERP or best of breed and be able to address the key issues of traceability following the new EU Food Law (178/2002).

Imagine you are a consumer shopping at one of the major supermarkets and when you get home you find a contaminated can of baked beans. How can the retailer trace this item back to the batch containing the unsafe ingredient? If they cannot then they may well have to pull the whole stock of that item throughout their supply chain.

In the first instance, the retailer would have to go back through each step of the supply chain - from the shelves to logistics service provider who will have stored and transported the goods, back to the manufacturer who made the baked beans and maybe even to the manufacturer who made the cans. For this to happen quickly and efficiently all the participants in this chain must collaborate and share common information irrespective of the IT solution you may have in place.

So, there are two issues here do you go with an ERP provider or best of breed to ensure supply chain effectiveness and how do you deal with the traceability of food safety issues?

ERP versus best of breed, a common choice to make among manufacturers and consumer products companies. Providers of ERP can offer breadth of functionality to make it all work, both internally and externally and can take collaboration to the next level. Best of breed providers may well have the depth of functionality in specific area but will most probably lack the breadth required to effectively reach outside the companies boundaries. You need to be able to drill back from a sales order right back to the goods received document and the original purchase order for that particular item. Armed with this information the manufacturer can in turn trace back from the delivery note back to the production run and eventually the original batch of ingredients under suspicion.

Following on from the Sudan 1 story, it is very important that companies ensure that the traceability of ingredients is easy and efficient. The new EU food law regulation (EU 178/2002 TBC) highlights the importance of protecting public health and consumers interest in relation to food and applies to all stages of production, processing and distribution of food. The whole of the ecosystem must be able to support the tracing of items from consumer to retailer, manufacturer and eventually the original producer. Then as important is the ability to trace the entire supply of the ingredient or material in question back through the supply chain in order to recall all suspect products.

How can this be done? This level of visibility through the entire collaborative supply chain of any ecosystem can only be achieved through powerful integrated application. The adoption of solutions that support an Adaptive Business Network will put companies in a strong position to respond to the unforeseen events of tomorrow. Sophisticated IT applications can help make this possible but can only do so if underpinned by a level of trust between the participants.

Santosh Takoor, joined SAP UK in 1999 initially as a Consultant and then in a pre-sales role. In his current position as Industry Development Manager, Santosh is responsible for the development of short-term tactical and long terms strategic development plans for the manufacturing industries. Prior to his time at SAP, Santosh spent two years at UBS Warburg as Financial Controller for the UK Corporate Finance business and also as Global Business Administrator. Before that, he spent seven years at KPMG where he qualified as a chartered accountant. Santosh has a B.Eng degree in electronic engineering from Kings college, London.